TiVo Breaks Into Home Networks

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TiVo Breaks Into Home Networks

TiVo said on Wednesday it expanded its service to allow subscribers to download and record movies and music from the Internet, in a bid to differentiate itself from other digital recording devices offered by cable and satellite services.

TV watchers can now connect their basic TiVo Series2 DVR to a home network and share content between two or more TiVo boxes in the same household, schedule recordings using the Internet, play music and view digital photos – all features previously available with the company's home media option for an added fee.

The company also cut some of its prices. Customers can now purchase the TiVo Series2 DVR for $130 online with a $50 mail-in rebate and a 10 percent discount offered through June. For those who have more than one TiVo in the home, monthly subscriptions will now cost $7 a month for that additional box instead of the regular $13.

It makes sense for TiVo to add more features and functions to make it more than a just a stand-alone DVR, analysts said.

"With cable operators rolling out DVRs, that basic time-shifting function is being commoditized," said Aditya Kishore, an analyst with the Yankee Group. "Why would a consumer want to spend $150 for a TiVo box when you can essentially get that basic capability for $5 from your cable operator?"

TiVo is thinking beyond the DVR to how the company can play a role in the digital home, said Greg Ireland, an analyst with IDC. Because cable and satellite providers are essentially giving away DVRs, "it's very difficult to compete on price, so you have to compete on features," Ireland said.

Yet while TiVo's ability to pause and fast-forward television programs has created loyal fans, mainstream television watchers are still slow to adopt the technology.

"The question will be whether consumers will continue to be attracted to the easy entry into DVR from cable and satellite or will they seek out that advanced functionality that TiVo is now providing," Ireland said.

The announcement comes on the heels of the news that DirectTV sold its stock in TiVo on Tuesday, fueling speculation that the satellite provider may dump TiVo. DirectTV uses the TiVo service for its DVR packages. About 75 percent of TiVo's new subscribers in the first quarter of this year came from its partnership with DirectTV. Of TiVo's 1.4 million subscribers, about 60 percent are DirectTV customers, Ireland said.

If DirectTV were to opt for another DVR provider, it would likely go with NDS, which provides DVR services for BSkyB, a British digital television service. Rupert Murdoch owns all three companies, Ireland said.